Science
Investigating the drug-makers
Bernard Dixon
Once again, I see, the pharmaceutical industry is to be investigated. This time, the Labour Party will do the investigating, presumably with a view to refurbishing those perennial arguments for nationalisation. Perhaps more acutely than with any other industry, the case for state-ownership of the drug makers sounds initially like an excellent idea. Above all, there is abundant evidence of grotesquely extravagant expenditure on advertising and of the marketing of unnecessary products — such as minute variations on common themes, like so many different soap powders — which have little to do with the welfare of sick people. Anyway, why should shareholders make money out of the sick?
Whenever anyone proposes nationalisation as a panacea for these and other deficiencies of the drug industry, the Association of the British Pharmaceutical Industry puts out plaintive literature urging that because medicines are important exports, we must do nothing to upset the present structure of the industry. With drug exports currently amounting to some £.168 million per annum, this is an argument worth listening to. It is not, however, one that interests me particularly. The real net earnings to the country through pharmaceutical exports are in fact difficult to assess, and a continual source of argument between nationalisers and free enterprisers.
What is vitally important is the argument behind the financial one, the argument that state-ownership would work in such a way as to curb innovation and reduce the flow of genuinely new medicaments. This is not a political judgment; it is a direct consequence of scientific method. The pharmaceutical industry in a free-enterprise economy is very close to the ideal, hypothetical framework likely to generate, from fixed technical resources, as many important new drugs as possible. With all the remaining problems of medicine — cancer, virus diseases, and so on — the best chances of success come by having groups of scientists pursuing entirely different experimental and conceptual approaches, and by exploiting success at once in any one of these different teams. This is precisely what occurs in the competitive climate of the pharmaceutical industry. Research departments in different companies attack common problems but in distinctively different ways, and commercial secrecy ensures that they are not influenced by each other's thinking. Then, when a breakthrough comes, commercial pressures facilitate rapid exploitation. Flexibility is vital. Those in charge must be willing to redeploy resources of money and manpower to take early advantage of significant progress, and to abandon unpromising lines of research ruthlessly at the right time.
These are just the conditions which do not obtain in a state-owned monolithic industry. And this is not simply armchair speculation, but also practical reality. Apart from one or two vaccines (development of which involves no radically new concepts), the drug industry of the Soviet Union, for example, has yielded not a single major therapeutic breakthrough in its entire history. Moreover, university, hospital, and other non-commercial laboratories in the West — which, of course, trade in the currency of non-secret, openly-published science — have with one or two exceptions generated relatively little in the way of new drugs. Sadly, perhaps, from a scientific standpoint, one must conclude that competition geared to the profit motive, together with commercial secrecy, is a highly effective force in encouraging innovation.
There is, of course, another factor -the increasing cost of research — which might favour the large unit as against smaller ones in competition. But even allowing for this, diversity seems to be more important. This, indeed, was the major reason given by the Monopolies Commission in disallowing the Beecham and Boots bids for Glaxo recently. Arguing that Britain's research effort could be weakened by the eradication of an independent research programme, the Commission cited several studies showing that, above a certain size of company, bigness does not necessarily lead to greater success in innovation — possibly the contrary. The Commission's decision put a welcome brake on a movement which was inexorably driving the drug industry, by merger after merger, towards a monolithic situation just as undesirable as state-ownership.
We do, nonetheless, pay a huge price for the prolific inventiveness of the drug houses — notably lavish expenditure on advertising (about the same as research spending) and the marketing of unnecessary and dubious products. The Labour Party's committee could usefully investigate these practices ane. abuses. But it should forget about the emotive shibboleth of state-ownership.
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